The German DAX had a strong session on Monday, gaining over 1%, despite the initial sell off. Once traders got over the idea of the metals sell off being so brutal, it looks like we started to focus on fundamentals again.
DAX Index
The German DAX had a strong session on Monday, gaining over 1% as we have seen buyers come back into the marketplace to push to the upside. The market had previously broken to the upside and now has tested the previous resistance only to bounce.
The German DAX is an index that I like a lot and have been watching a lot lately, mainly due to the fact that the German government is likely to toss a boatload of money into the infrastructure play and the actual German economy, which should help most of the large companies in this index.
Furthermore, you have to think about whether or not the market is going to have more risky appetite or less. Risk appetite, I think, is a bit of a fluid situation around the world and of course this would not have been any different in Germany than it would anywhere else.
Market Outlook and Key Levels
So, with that being the case, I think you have to look at this through the prism of a market that eventually goes to the upside and perhaps gets the market really moving. With this being the case, I look at this through the idea of buying short-term dips which could open up the possibility of a move towards the 25,500 level.
Anything above there would have been much higher, and I think the market really started to rush much higher at that point and the flood gates open. If we turn around and break down below the 24,250 level, then I think the DAX goes looking at the 200-day EMA.
I don't necessarily think this is something that will happen very often or easily, but I do recognize that occasionally we will get the nasty pullback that could open up possibility for more buying opportunities. I have no interest whatsoever in trying to fight the trend and I do think that ultimately DAX will be a big winner.
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